Question: a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, or out of
a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, or out of the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be (assume your initial investment is the option premium for each case). (Enter " 0 " if there is no profit or return from not exercising the option. Round your answers to 2 decimal places. Loss amounts should be indicated by a minus sign. Please write the formulas by which you obtain the net profit.) b. Now suppose that time has passed and the stocks' prices have changed as indicated in the table below. Recalculate your answers to part a. (Enter " 0 " if there is no profit or return from not exercising the option. Round your answers to 2 decimal places. Please write the formulas by which you obtain the net profit.)
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